The CEO of eHealth Ontario is returning the $81,250 bonus he was paid for this year.

A statement from the eHealth board of directors says Greg Reed has offered to decline his performance bonus for 2011-12, which was about 25% of his $329,000 annual salary.

The Progressive Conservatives and New Democrats demanded Health Minister Deb Matthews cancel Reed’s bonus after The Canadian Press reported it Sunday.

Board chair Ray Hession says he fully supported the decision of the eHealth directors to award Reed the bonus to reward his “outstanding leadership” of the provincial agency.

Hession says he wants to make it clear Reed has the full trust and confidence of the eHealth board.

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Employees of eHealth have launched a class-action suit to recover bonuses of about 7.9% they were promised in 2011 but denied by the Liberal government, which wants a two-year wage freeze across the public sector.

Matthews’s office said Sunday that the eHealth board had “no choice” but to provide performance pay under the terms of Reed’s contract.

Reed was brought in by the Liberals in 2010 when they cleaned house at eHealth after the auditor general found there was little to show for the $1 billion that had been spent to that point to develop electronic health records.

David Caplan was forced to resign as health minister because of the scandal, which also saw outside consultants awarded untendered contracts worth millions of dollars.